Friday, June 22, 2018

Standard and Poor's renews Sverdlovsk Oblast's BB+ rating

On November 5, Standard & Poor's Ratings Services announced that it will renew the BB+ credit rating for the Russia's Sverdlovsk Oblast.

The favorable rating deeming Sverdlovsk Oblast's financial health as "stable" was issued after S&P fully reviewed a draft of the region's 2013-2015 budget. The ratings agency said the budget's predictability and flexibility as it pertains to the region's material operating and capital spending needs, Reuters reports.

The Sverdlovsk Oblast also benefits from having relatively low debt in comparison to other Russian regions.

S&P said that, per its ratings criteria, the Sverdlovsk Oblast's liquidity position is "positive". A positive liquidity rating indicates the region's supply of free cash exceeds its annual debts.

Yekaterinburg, the capital city of the Sverdlovsk Oblast, was selected to be one of the hosts for the FIFA World Cup in 2018. While the total cost to install infrastructure in Yekaterinburg to meet FIFA's requirements remains unknown, S&P analysts are confident that the region's relatively strong economy can accommodate the expenses, according to Reuters.

S&P indicated, however, that the volatility of the Russian economy as a whole will limit the Sverdlovsk Oblast's access to external liquid funds. Russia scored a seven on S&P's Banking Industry Country Risk Assessment, indicating a high level of risk.